Friday, November 13, 2015

In his testimony
during the October 28 hearing on “Breaking Down
Barriers to Broadband Infrastructure Deployment,” before the
House of Representatives’ Energy and Commerce Committee, Scott Bergmann, VP of
Regulatory Affairs at CTIA – The Wireless Association, stated that “sound
infrastructure policy is a necessary complement to good spectrum policy.” Since
1996, U.S. Internet Service Providers (ISPs) have invested $1.4 trillion in broadband
infrastructure. With each passing year, ISPs will likely invest more and more,
but there are barriers that constrain private investment. Of course, costly Internet
regulations
create investment barriers. But other rules at the federal, state, and local
levels regarding approval and construction stifle broadband investment as well.

There are six pieces of
draft legislation
proposed in the House which would lower deployment costs and streamline some of
the approval processes, including a “dig once”
policy.
But as Mr. Bergmann said at the hearing, infrastructure policy and spectrum
policy are complements. Therefore, Congress must get it right on both ends for consumers
to experience next-generation mobile broadband for years to come.

In 2012, the Congressional
Budget Office (CBO) released a report regarding
legislation that authorized the FCC to auction spectrum. The CBO estimated that
the AWS-3 auction would either not happen or would not bring in any revenue.
This turns out to be massively underestimated considering that the AWS-3
auction generated roughly $41 billion and the TV broadcasting auction scheduled
for March 2016 is likely to generate another $30 to $40 billion. Currently, a
new bill exists, the Federal Incentive
Spectrum Act
(FISA), which would allow federal
agencies that relinquish spectrum to keep 1 percent of the proceeds from the
sale. Hopefully, the CBO’s inaccurate
2012 report does not have a lasting effect on members of Congress as FISA moves
forward, because reallocating spectrum is absolutely crucial for the economy.

Both spectrum
policy and broadband infrastructure policy should be bipartisan issues. The
current amount of spectrum allocated for private use will not be enough to keep
up with mobile data traffic, which is projected to increase seven-fold from
2015-2019.
Additionally, wireless broadband needs wireline infrastructure and many cell
towers to deliver quality service. Therefore, Congress should focus on two policies
in this space: 1) removing costly barriers so providers can install
next-generation technologies throughout the country and 2) reallocating
licensed spectrum for private use. Given the positive effect that mobile
broadband has had on the economy as a whole and the benefits it brings to
American consumers, both of these policies should receive bipartisan support
from Congress.

As for the
valuation of spectrum auctions, the CBO report was inaccurate. Not only did the
CBO claim that the AWS-3 auction would not bring in any revenue, it also failed
to realize that allocating more spectrum for commercial use would increase
economic activity and create jobs. In a May 2015 Brattle Group and CTIA report
entitled “Mobile Broadband
Spectrum: A Vital Resource for the American Economy,” authors Coleman
Bazelon and Giulia McHenry estimated that licensed spectrum has created $400
billion in economic activity, not including the value of mobile applications. Mr.
Bazelon and Ms. McHenry also estimated that for every person employed in the
wireless industry an additional 6.5 people will be employed in other sectors. (See
my May 2015 blog for more on this.)

When economic
activity and jobs are created, the tax base expands, thus creating more
opportunities for the government to generate revenue. Therefore, in the long run,
reallocating spectrum for private use is a win-win – a win for the economy and
a win for taxpayers, because (all else equal) expanding the tax base marginally
reduces the tax burden on each individual.

Mobile broadband
is transforming day-to-day life in areas like medicine, education, and even
policy decisions. For example, telemedicine allows patients to be monitored
remotely and can send signals to doctors about possible health threats. Patients
who require monitoring will need a mobile connection so doctors can monitor
their status at any given time. The rapid growth of mobile data traffic
increases the potential for network congestion. Patients who use telemedicine
cannot afford to experience congestion or latency. Reallocating spectrum for
private use and removing deployment barriers would increase the capacity of
mobile networks, mitigate congestion, and potentially save lives.

Mobile technology
has already changed the way teachers and students communicate, but with more
spectrum and deployment, students will be able to utilize their time more
efficiently. The 2010 National
Broadband Plan
set the goal of connecting all schools with high-speed Internet access, but the
FCC has failed to accomplish the spectrum goals, a prerequisite for schools
having access to 21st century technology. According to the National
Broadband Plan, the FCC should have reallocated 300 MHz of spectrum by 2015,
but currently has only reallocated 149 MHz.

Additionally, it
can take many years to get permission to build broadband infrastructure on federal property, which is often the
only or best way to reach many rural schools. As state and local governments
are attempting to fully equip schools with 21st century technology, education
curriculum is moving online and digital literacy is becoming a necessary skill.
More spectrum and broadband deployment would allow professors to provide students
with course work while traveling, teachers to enhance the learning experience
of school field trips, and students to research in off-campus settings.

Importantly to
members of Congress, constituents are using mobile broadband to engage
themselves and others in the political process. Social media platforms, like
Facebook and Twitter, are allowing people of all ages and demographics to have
a greater voice in shaping policy.

The expansion of mobile
broadband has positively impacted the economy, medicine, education, policymaking,
and many other realms of American life. It is certainly time for Congress to
act to remove barriers to further infrastructure deployment that, if not
addressed, are likely to negatively impact the consumer experience in future
years.